To create a theme for the morning, when I have already written about tax and responsible investment, I note that my Fair Tax Mark colleague Paul Monaghan has an article on the forthcoming Fair Tax Fortnight on the Ethical Corporation website. In it he refers to the first piece of work we did together on this issue, in 2006, with Sustainability:
Amongst the suggestions made in that report, which was ground-breaking when published, is this diagram oin stakeholder interest in this issue:
The report also made these suggestions as to why a company should be interested in tax reporting and how they should progress towatds it:
I suspect Paul and I would still agree on a great deal of that. It's interesting to compare with what the UNPRI are saying in their new report (using a remarkably similar colour scheme):
Progress is taking time. But I think the pace of change is growing. The time will soon come when people will wonder why comprehensive tax reporting was ever an issue. But we need full country-by-country reporting before that happens. The UN PRI supports the idea, I am pleased to note. It's just a shame that the accounting profession does not as yet.
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Richard, you predicted elsewhere that share prices would crash and not recover. In that environment tax reporting seems rather inconsequential.
No it doesn’t
I did not say profits would disappear
That’s a bit confusing. You said gilts would prove a better investment than shares. But if companies continue to be profitable then how can that be correct in the long term?
I have said shares are heavily over valued
I think there will be limits on rentier capitalism
I said companies are not meeting need
I said some sectors face structural issues
I never said there would be no genuine profits
you go and figure what that means
My conclusion is logical – it appears you can’t even manage anything but the status quo
So, normal for the City then….
Maurice James says:
“That’s a bit confusing. [To bear of little brain :-)] You said gilts would prove a better investment than shares. But if companies continue to be profitable then how can that be correct in the long term?’
Surely it will depend to a great deal on the sustainability of the company’s current model of profitability.? Where companies are boosting their share price by buy backs that has to be inherently unsustainable as opposed to investing in the core activities which generate profits. This leaches value from a company for short term advantage. Where this process is taking advantage of low interest loans companies will be very exposed when interest rates rise. They don’t need to rise, but the received wisdom which dominates the financial playing field says that interest rates need to be ‘normalised’.
How is that not going to cause havoc ? Companies will go down and banks will be exposed to huge pressure from unpayable debts. Compounded by the new raft of unemployed workers who can no longer service their personal debt.
Is this other than inevitable from where we are now ?
This direction of travel is being led by the US, but when America sneezes…..
Currency issuing governments do not go bust. They may suffer undesirable consequences in the face of private sector financial collapse, relative to other countries, but they remain standing. Or should do.
It is the job of government to prevent financial Armageddon, but I don’t see much sign of anticipation of it, let alone active steps to address it.
You’ve said that the veil of secrecy must be removed as the price of allowing limited liability.
Presumably you will carry on demanding that the veil of secrecy stays pulled tight shut for those who enjoy limited liability via an LLP?
I know. It’s different. Because reasons.
I publish my accounts in full even though law does not require it.
So I suggest you stop making yourself look foolish.
You don’t publish your tax details.
It is you who looks foolish as you insist on delving into everyone else’s tax affairs while hiding your own.
I have heard it’s one of the reasons Corbyn and McDonnell distanced themselves from you. They published their tax returns, you refused to publish yours, they wondered what you were hiding.
I know full well that is not true
They have never asked anyone in Labour to do that
You really are a fantasist
Peter Knowles,
Trivial ‘Whataboutery’ is very tedious.
It simply ignores issues.
The issue of a man who calls for tax transparency while hiding his own tax affairs. You must have your eyes screwed tight shut not to see the hypocrisy.
I disclose all I call for others to disclose
There cannot be a whiff of hypocrisy about that
Now stop wasting my time when you don’t even know what hypocrisy is
I think this article is an important one, and I plan to share it on Facebook.
I especially like the point about the difference between companies staying within the letter of the law or choosing to respect the spirit of the law instead.
The word ‘loophole’ sprang to my mind, even before it popped up in the text. Yep. There is always a loophole, isn’t there? However, if tax liabilities are more transparent and companies are held to account and their practices made public, they might stop seeking loopholes to get them out of paying the amount of tax they morally owe. It’s to be hoped anyway. If you owe taxes on the profits you’ve made, just bloody pay them. Your nose will be clean and we can all move on.
I also believe that paying taxes in the country where profits are made (when that can be determined) is what’s fair and most socially beneficial. Your article made that point as well.
I also liked the point the article made (which I hadn’t thought of before) which is that tax transparency gives us a better idea of what state a company is actually in. This will help us choose how to make wiser, more solid investments.
Thank you for what you do, Mr Murphy. I always come away from your articles feeling more clued-up than when I started reading them.
Thank you